The economic impact because of the novel coronavirus pandemic on the American economy continues to pile up – evident from a fresh batch of about 4.4 million Americans filing for unemployment benefits last week.
The total; number of applications for unemployment benefits by Americans touched 26.4 million, with last week’s numbers, since mid-March.
The total number of jobless Americans is more than 15 per cent of the total workforce of the country.
Despite the record numbers, the latest data about the numbers from last week was the third week in a row that the country saw a decline in the number of new claims which has raised hopes that the worst was apparently over.
“While this week’s 4.4 million jobless claims are staggering, there are signs that the pace of layoffs has reached its peak,” said Richard Flynn, UK managing director at financial service firm Charles Schwab. “The key questions at this point are when can the economy reopen and what happens when it does?”
According to economists and global institutions such as the World Bank and the international Monetary Fund (IMF), the global economy is set to face a recession that has nto been seen since the Great Depression of the 1930s
According to the IMF, there will be a 5 per cent contraction in the economy of the United States this year. The number of Americans who have been thrown out of work in just six weeks since the pandemic spread in the country, is higher than the total number of jobs that had been created in a continued expansion for the job market for almost a decade which came to a halt this February.
In order to provide support to this unprecedented rout of its economy, aid packages worth more than $2 trillion have been approved by the US government which included and expansion of the eligibility criteria for unemployment benefits while also increasing the payments.
According to the US Labor Department, more than 16 million Americans received the unemployment benefits in the week ended 11 April which is an all time record. However there have been issues for many people to get their applications processes through the state offices.
Funds for an announced $349bn relief programme for small businesses which was part of the $2tn rescue package by the government went dry within just two weeks.
There has also been criticism of the government of it’s programme, through which low-cost loans are offered that do not need to be repaid if the recipient meets certain conditions, over allegations that it was not reaching the smallest of firms which need it the most.
“We’re just waiting,” said New York restaurant-owner Larry Hyland, who applied the first day that banks started accepting applications on behalf of his Brooklyn-based beer garden, Greenwood Park, according to a report published in the BBC.
According to recent reports, it has been alleged that large publicly listed companies instead of the smallest of the mom-and-pop shops have received about two-thirds of the money so far. This is because those large companies already have pre-existing relationships with banks and hence are in an advantageous position compared to the very small businesses.
(Adapted form BBC.com)